ITO, New Delhi v. M/s N. R. Portfolio P. Ltd., New Delhi

ITA 2177/DEL/2010 | 2004-2005
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 217720114 RSA 2010
Assessee PAN AAACN2431P
Bench Delhi
Appeal Number ITA 2177/DEL/2010
Duration Of Justice 1 year(s) 2 month(s) 15 day(s)
Appellant ITO, New Delhi
Respondent M/s N. R. Portfolio P. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 22-07-2011
Date Of Final Hearing 02-05-2017
Next Hearing Date 02-05-2017
Assessment Year 2004-2005
Appeal Filed On 07-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH E BENCH E BENCH E BENCH E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI C.L.SETHI JM BEFORE SHRI C.L.SETHI JM BEFORE SHRI C.L.SETHI JM BEFORE SHRI C.L.SETHI JM AND SHRI SHAMIM YAHYA AM AND SHRI SHAMIM YAHYA AM AND SHRI SHAMIM YAHYA AM AND SHRI SHAMIM YAHYA AM ITA NO. ITA NO. ITA NO. ITA NO. 2177/DEL/2010 2177/DEL/2010 2177/DEL/2010 2177/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2004 2004 2004 2004 - -- - 05 0505 05 INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER WARD WARD WARD WARD- -- -13(1) 13(1) 13(1) 13(1) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. VS. VS. VS. VS. M/S N.R.PORTFOLIO PVT.LTD. M/S N.R.PORTFOLIO PVT.LTD. M/S N.R.PORTFOLIO PVT.LTD. M/S N.R.PORTFOLIO PVT.LTD. C/O PRAKAS C/O PRAKAS C/O PRAKAS C/O PRAKASH K.PRAKASH CAS H K.PRAKASH CAS H K.PRAKASH CAS H K.PRAKASH CAS B BB B- -- -1 SAGAR APARTMENTS 1 SAGAR APARTMENTS 1 SAGAR APARTMENTS 1 SAGAR APARTMENTS 6 TILAK MARG 6 TILAK MARG 6 TILAK MARG 6 TILAK MARG NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN NO. PAN NO. PAN NO. PAN NO.AAACN2431P. AAACN2431P. AAACN2431P. AAACN2431P. (APPELLANT) (RESPONDENT) CROSS CROSS CROSS CROSS - -- - OBJECTION NO.207/DEL/2011 OBJECTION NO.207/DEL/2011 OBJECTION NO.207/DEL/2011 OBJECTION NO.207/DEL/2011 (IN (IN (IN (IN ITA NO. ITA NO. ITA NO. ITA NO.2177/DEL/2010) 2177/DEL/2010) 2177/DEL/2010) 2177/DEL/2010) ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2004 2004 2004 2004 - -- - 05 0505 05 M/S N.R.PORTFOLIO PVT.LTD. M/S N.R.PORTFOLIO PVT.LTD. M/S N.R.PORTFOLIO PVT.LTD. M/S N.R.PORTFOLIO PVT.LTD. C/O PRAKASH K.PRAKASH CAS C/O PRAKASH K.PRAKASH CAS C/O PRAKASH K.PRAKASH CAS C/O PRAKASH K.PRAKASH CAS B BB B- -- -1 SAGAR APARTMENTS 1 SAGAR APARTMENTS 1 SAGAR APARTMENTS 1 SAGAR APARTMENTS 6 TILAK MARG 6 TILAK MARG 6 TILAK MARG 6 TILAK MARG NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 001. 110 001. 110 001. 110 001. PAN NO.AAACN2431P. PAN NO.AAACN2431P. PAN NO.AAACN2431P. PAN NO.AAACN2431P. VS. VS. VS. VS. INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER INCOME TAX OFFICER WARD WARD WARD WARD- -- -13(1) 13(1) 13(1) 13(1) NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) REVENUE BY : MRS.SRUJANI MOHANTY SR.DR. ASSESSEE BY : SHRI TARUN ASWANI ADVOCATE. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA AM PER SHAMIM YAHYA AM PER SHAMIM YAHYA AM PER SHAMIM YAHYA AM : :: : THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION BY THE ASSESSEE EMANATE FROM THE ORDER OF LEARNED CIT(A) DATED 8.2. 2010 AND PERTAINS TO AY 2004-05. REVENUES APPEAL :- 2. THE ISSUES RAISED IS AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF 2 RS.35 00 000/- MADE ON ACCOUNT OF SHARE APPLICATION MONEY U/S 68 OF THE INCOME TAX ACT 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.87 500/- MADE ON ACCOUNT OF COMMISSION. 3. THE FACTS IN THIS CASE ARE THAT THE AO ADDED `3 5 LAKHS U/S 68 OF THE IT ACT IN ASSESSMENT FRAMED U/S 147/144 OF THE IT ACT ON ACCOUNT OF SHARE APPLICATION MONEY. THE AO HELD THAT ASSESS EE FAILED TO DISCHARGE THE ONUS OF PROVING THE IDENTITY AND CRED ITWORTHINESS OF CONCERNED PARTIES AND GENUINENESS OF TRANSACTION IN TERMS OF SECTION 68 OF THE IT ACT. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) ASSESSEE FILED DOCUMENTS PERTAINING TO SHARE APPLICANTS. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) SENT THOSE DOCUMENTS TO THE ASSESSING OFFICER AND OBTAINED A REMAND REPORT. LEARNED CIT(A) HELD A S UNDER:- 4.6.4 AS REGARDS APPELLANTS CONTENTION ON MERITS IT CAN BE SEEN THAT WHILE PASSING THE IMPUGNED ORDER THE ASSESSING OFFICER MADE ADDITION OF RS.35 00 000/- U /S 68 ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM DI FFERENT SUBSCRIBERS AND THIS AMOUNT OF RS.35 00 000/- REPR ESENTS THE DIFFERENCE IN THE OPENING AND THE CLOSING BALAN CE OF THE SHARE CAPITAL. DEFINITELY THE ASSESSING OFFICE R HAS OVERLOOKED THE RATIOS OF THE CASE OF CIT VS. LOVELY EXPORTS PVT.LTD. (SUPRA) WHEREIN THE HONBLE APEX COURT WH ILE ANSWERING THE QUESTION THAT CAN THE AMOUNT OF SHAR E MONEY BE REGARDED AS UNDISCLOSED INCOME U/S 68 OF I T ACT 1961 HELD THAT IF THE SHARE APPLICATION MONEY IS R ECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOL DERS WHOSE NAMES ARE GIVEN TO THE AO THEN THE DEPARTMEN T IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSME NTS IN ACCORDANCE WITH LAW. THE APPELLANT COMPANY HAD RECEIVED SHARE APPLICATION MONEY FROM M/S SAI GANES H EXPORTS P.LTD. M/S PLUS INDUSTRIES LTD. (NAME CHAN GED TO M/S POONAM INFRA PROJECTS P.LTD.) M/S OMNI PRESENT CREDITS P.LTD. M/S SADASHIV STOCK AND SHARES P.LTD. M/S M ANSI EXPORTS P.LTD. M/S PRATHA FINVEST P.LTD. AND M/S R AF STEEL P.LTD. AND AS PER THE INFORMATION PROVIDED BY THE A PPELLANT COMPANY ALL THE ABOVE MENTIONED PARTIES HAVE BEEN 3 ALLOTTED PAN BY THE DEPARTMENT AND WERE FILING THEI R INCOME TAX RETURNS. DURING THE COURSE OF REMAND PROCEEDINGS TOO THE ASSESSING OFFICER COULD NOT PR OVE WITH CERTAINTY THAT ABOVE MENTIONED ENTITIES ARE THE ENT RY PROVIDERS AND THAT THE TRANSACTIONS ENTERED BY THE APPELLANT COMPANY WITH THEM IS BOGUS. THE ARGUMENT S OF THE LD.AR AS MENTIONED EARLIER IS THAT VARIOUS DO CUMENTS FILED BEFORE THE ASSESSING OFFICER (WHICH WERE RECE IVED ON 18.12.2007 BY THE ASSESSING OFFICER WHEREAS THE IMP UGNED ORDER WAS PASSED ON 17.12.2007) AND DURING THE COUR SE OF PRESENT PROCEEDINGS SUPPORTED THE IDENTITY OF THE INVESTORS/SHARE APPLICANTS AND ALSO PROVES THAT THE SHARE APPLICATION TRANSACTIONS ENTERED BY IT WITH THE SAI D INVESTORS ARE GENUINE TRANSACTIONS. VERIFICATION O F PAN HAS BEEN DONE DURING THE PRESENT PROCEEDINGS AND FOUND TO BE IN ORDER. AFTER CONSIDERING THE VARIOUS JUDGMENTS OF JURISDICTIONAL HIGH COURT AS WELL AS OF HONBLE SUP REME COURT I AM OF THE VIEW THAT NO ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY CAN BE MADE IN THE HANDS OF THE APPELLANT COMPANY. THE ASSESSING OFFICER HAS NOT E FFECTED ANY ENQUIRIES TO BRING OUT ANY FACT WHICH COULD SUG GEST THAT THESE PARTIES HAVE GIVEN ACCOMMODATION ENTRIES TO THE APPELLANT AND THAT THE MONEY RECEIVED FROM THES E PARTIES IS APPELLANTS OWN UNDISCLOSED INCOME AND R OUTED BACK TO THE APPELLANT COMPANY IN THE GUISE OF SHARE APPLICATION. EVEN APPELLANT HAS NOT BEEN PROVIDED WITH AN OPPORTUNITY TO CROSS-EXAMINE THE SO CALLED ENTRY PR OVIDERS AND THE FACT IS THAT THE ASSESSING OFFICER HAS SIMP LY RELIED UPON THE INFORMATION PROVIDED BY THE INVESTIGATION WING OF THE DEPARTMENT WITH NO CONCRETE EFFORTS TO VERIFY T HE FACTS STATED THEREIN. ON THE CONTRARY THE APPELLANT HAS FILED COPIES OF SHARE APPLICATION FORMS WHICH CONTAINED N AMES ADDRESSES PAN BANK DETAILS AND CONFIRMATIONS OF T HE INVESTORS AND HENCE IN VIEW OF VARIOUS JUDICIAL PRONOUNCEMENTS NO ADDITION CAN BE MADE IN APPELLAN TS HAND. IN THE CASE OF ADDL.CIT VS. HANUMAN PD.AGGAR WAL 151 ITR 151 (PATNA) IT WAS HELD THAT ASSESSEE HAVIN G FURNISHED THE CORRECT NAME AND ADDRESS OF THE CREDI TOR HAVING CONFIRMATORY LETTER FROM THE CREDITOR AND AL L MATERIALS SHOW PRIMA FACIE NOT ONLY IDENTITY OF THE CREDITOR BUT ALSO THE GENUINENESS OF THE TRANSACTION NO ADV ERSE INFERENCE CAN BE DRAWN. REFERENCE CAN ALSO BE MADE TO THE JUDGEMENT OF HONBLE APEX COURT IN THE CASE OF STELLER INVESTMENT LTD. (2001) 251 ITR 263 (SC) WHEREIN IT WAS HELD THAT EVEN IF THE SUBSCRIBERS TO THE INCREASED SHARE CAPITAL OF ASSESSEE COMPANY WERE NOT GENUINE THE A MOUNT COULD NOT BE REGARDED AS UNDISCLOSED INCOME OF THE 4 ASSESSEE COMPANY. THE ABOVE VIEW POINT OF THE HON BLE APEX COURT HAS ALSO BEEN EXPRESSED BY JURISDICTIONA L DELHI HIGH COURT IN THE CASE OF DIVINE LEASING & FINANCE LTD. (2008) 299 ITR 268 (DEL) A-ONE HOUSING COMPLEX LTD . VS. ITO 110 ITD 361 (DEL) CIT VS. VALUE CAPITAL SERVIC E PVT.LTD. 307 ITR 334 (DEL) AND CIT VS. GENERAL EXPORTS AND C REDITS LTD. (2008) 299 ITR 268 (DEL). IN THE CASE OF CIT VS. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. DIV INE LEASING & FINANCE LTD. (SUPRA) HAS LAID DOWN THE LA W ON THE SUBJECT AS TO WHAT IS THE EXTENT OF THE BURDEN THAT LIES ON THE ASSESSEE TO PROVE THE CASH CREDIT IN THE SHA PE OF SHARE CAPITAL. THE HONBLE COURT HELD THAT IF THE RELEVANT DETAILS OF THE ADDRESS OR PAN IDENTITY OF THE CREDITOR/SUBSCRIBER ARE FURNISHED TO THE DEPARTMENT ALONGWITH THE COPIES OF SHARE HOLDERS REGISTER SH ARE APPLICATION MONEY FORMS SHARE TRANSFER REGISTER E TC. IT WOULD CONSTITUTE ACCEPTABLE PROOF OR ACCEPTABLE EXPLANATION BY THE ASSESSEE. THE DEPARTMENT WOULD NOT BE JUSTIFIED IN DRAWING AN ADVERSE INFERENCE ONLY B ECAUSE THE CREDITORS/SUBSCRIBERS FAILS OR NEGLECTS TO RESP OND TO ITS NOTICES. THE ONUS WOULD NOT STAND DISCHARGED IF TH E CREDITOR/SUBSCRIBER DENIES OR REPUDIATES THE TRANSA CTION SET UP BY THE ASSESSEE NOR SHOULD THE AO TAKE SUCH REPUDIATION AT FACE VALUE AND CONSTRUE IT WITHOUT MORE AGAINST THE ASSESSEE. THE DEPARTMENT FILED AN SLP AGAINST THE DECISION OF DELHI HIGH COURT IN THE CAS E OF DIVINE LEASING AND FINANCE LTD. (SUPRA) WHERE THE A PEX COURT WHILE DISMISSING THE APPEAL FILED BY THE DEP ARTMENT HELD AS FOLLOWS:- WE FIND NO MERIT IN THIS SPECIAL LEAVE PETITION FO R THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY I S RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE AO THEN THE DEPARTMENT IS FREE TO PROCEED TO RE-OPEN THEIR INDI VIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. DELHI HIGH COURT IN THE CASE OF CIT VS. M/S PONDY M ETAL AND ROLLING MILL PVT.LTD. (ITA NO.788/2006) DATED 19.02 .2007 HAS CONCURRED WITH THE FINDINGS OF THE APPELLATE TR IBUNAL DELHI BENCH F NEW DELHI THAT ONCE THE IDENTITY O F THE INVESTOR HAS BEEN MANIFEST AND IS PROVED THE INVES TMENT CANNOT BE SAID TO BE THE UNDISCLOSED INCOME OF THE ASSESSEE. AT BEST THE AMOUNT COULD BE ADDED IN TH E HANDS OF THE INVESTOR BUT IT CERTAINLY COULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE APPEAL FILED AGAINST THE SAID DECISION WAS DISMISSED BY THE HON BLE 5 SUPREME COURT IN C.C. 12860/2007 DATED 08/01/2008. AS NO ADVERSE/INCRIMINATING MATERIAL HAS BEEN GATHERED BY THE ASSESSING OFFICER DURING THE COURSE OF THE ASSE SSMENT PROCEEDINGS HENCE I DO NOT SEE ANY JUSTIFICATION O N THE PART OF THE ASSESSING OFFICER TO MAKE ANY ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED FROM DI FFERENT PARTIES ESPECIALLY WHEN THE ASSESSING OFFICER HAS B EEN PROVIDED WITH PAN AND OTHER DOCUMENTARY EVIDENCES T O PROVE THE IDENTITY OF THE SHARE SUBSCRIBERS. IN VI EW OF ABOVE IT IS CLEAR THAT THE APPELLANT HAS DISCHARGE D THE INITIAL ONUS OF ESTABLISHING THE IDENTITY OF THE SU BSCRIBERS AND THE BONAFIDES OF THE TRANSACTIONS HENCE THE ASS ESSING OFFICER IS NOT JUSTIFIED IN IGNORING VARIOUS EVIDEN CES PROVIDED TO HIM BY THE APPELLANT. NOTHING ADVERSE HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO ESTABLISH THAT THE AMOUNT OF SHARE APPLICATION MONE Y RECEIVED BY THE APPELLANT FROM THE ABOVE MENTIONED DIFFERENT PERSONS REPRESENTS ITS OWN UNDISCLOSED IN COME. IN VIEW OF OUR AFORESAID DISCUSSION I DIRECT THE A SSESSING OFFICER TO DELETE THE ADDITION OF RS.35 00 000/- MA DE U/S 68 OF THE ACT. 4.1 THE LEARNED CIT(A) FURTHER HELD THAT SINCE THE ADDITION OF `35 LAKHS HAS BEEN DELETED THE ADDITION FOR COMMISSION OF `87 500/- ALSO STANDS CANCELLED. AGAINST THE ABOVE ORDER REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS IN THE LIGHT OF MATERIALS PRODUCED AND PRECEDENTS RELIED UPON. WE FIND THAT THE ASSESSEE IN THIS CASE HAS DULY FILED COPIES OF SHARE APPLICATIO N FORMS. THE NAMES AND ADDRESSES PAN BANK DETAILS AND CONFIRMATIONS OF THE INVESTORS HAVE BEEN FILED THEREFORE THE ASSESSEE HAS DISCHA RGED ITS ONUS. HENCE WE FIND CONSIDERABLE JUSTIFICATION IN THE CI T(A)S ORDER IN HOLDING THAT THE ASSESSEE HAS PROVIDED THE PAN AND OTHER DO CUMENTARY EVIDENCE TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANTS AND THE ADDITION U/S 68 IS NOT WARRANTED . 6. ON COMING TO THE ABOVE CONCLUSION WE ALSO PLACE RELIANCE OF THE HONBLE APEX COURT DECISION DELIVERED IN THE CAS E OF CIT VS. LOVELY 6 EXPORTS 216 CTR 195. IN THIS CASE IT WAS HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPA NY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE AS SESSING OFFICER THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN TH EIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW BUT IT CANNOT B E REGARDED AS UNDISCLOSED INCOME OF THE ASSESSEE. 7. WE FURTHER PLACE RELIANCE UPON THE DECISION OF T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF C.I.T. V G OURDIN HERBALS INDIA LTD. IN ITA NO. 665/2009 VIDE ORDER DATED 17.4.2009 WHEREIN IT HAS BEEN HELD AS UNDER:- THREE COMPANIES VIZ. M/S KUBERCO SALES PVT. LTD. M/S GARG FINVEST PVT. AND M/S MAFICO LEASING AND CONSULTANTS PVT. LTD. HAD SUBSCRIBED TO THE SHARE CAPITAL ISSUED BY THE ASSE SSEE. THE ASSESSING OFFICER HAD SOME DOUBTS ABOUT THE SOURCE OF THE INVESTMENT MADE BY THOSE THREE COMPANIES AND THEREF ORE MADE CERTAIN INQUIRIES. IN RESPONSE THE ASSESSEE PRODUC ED THE COPY OF THE BANK ACCOUNTS OF ALL THE THREE COMPANIES THE IR CERTIFICATES OF INCORPORATION AND ALSO THE INCOME TAX RETURNS FI LED BY THEM. FROM THE ABOVE DOCUMENTS THE IDENTITY AND GENUINEN ESS OF THESE COMPANIES IS CLEARLY ESTABLISHED. THE ONLY GROUND FOR MAKING ADDITION BY THE ASSESSING OFFICER WAS THAT THE BANK ACCOUNTS OF THE THREE COMPANIES REVEALED THAT THE AMOUNTS IN CASH WERE DEPOSITED IN THOSE ACCOUNTS AND THUS CHEQ UES WERE 7 ISSUED IN FAVOUR OF THE ASSESSEE COMPANY ALONGWITH SHARE APPLICATION MONEY. IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT FOLLOWING THE JUDGEMENT OF THE SUPREME COURT IN THE CASE OF COMM ISSIONER OF INCOME TAX VS. LOVELY EXPORTS PVT. LTD. 216 CTR 195 THE ITAT HAS RIGHTLY HELD THAT THE ASSESSEE HAD DISCHARGED I TS BURDEN. IN CASE THOSE THREE COMPANIES HAD RECEIVED CERTAIN CA SH WHICH WERE DEPOSITED IN THE BANK ACCOUNTS IT WAS FOR TH E INCOME TAX DEPARTMENT TO TAKE ACTION AGAINST THE SAID COMPANIE S. 8. WE FURTHER PLACE RELIANCE UPON THE DECISION OF T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF C.I.T. VS. DWARKADISH INVESTMENT P LTD. THE RELEVANT PARAS OF THIS JUDGEMENT OF HO NBLE DELHI HIGH COURT I.E. PARA NO. 6 7 & 8 ARE REPRODUCED HEREIN BELOW:- 6. IN OUR OPINION AS SECTION 68 OF THE ACT 1961 HAS BEEN INTERPRETED AS RECENTLY AS 2008 BY A DIVISION BENCH OF THIS COURT IN DIVINE LEASING AND FINANCE LTD. (SUPRA) AF TER CONSIDERING ALL THE RELEVANT JUDGEMENTS WE DO NOT HAVE TO RECONSIDER ALL THE JUDGEMENTS REFERRED TO BY MR. SA HNI WHICH ARE PRIOR IN DATE AND TIME TO THE AFORESAID JUDGEMENT. IN FACT A SPECIAL LEAVE PETITION FILED AGAINST THE SAID DIVISION BENCH JUDGEMENT WAS DISMISSED BY THE SUPREME COURT BY WAY OF SPEAKING ORDER IN C.I.T. VS . LOVELY EXPORTS (P) LTD. 216 CTR 195 (SC). THE SUPREME COU RT IN LOVELY EXPORTS PVT. LTD. (SUPRA) HAS HELD AS UNDER: - 8 CAN THE AMOUNT OF SHARE MONEY BE REGARDED AS UNDISCLOSED INCOME UNDER SECTION 68 OF THE INCOME TAX ACT 1961. WE FIND NO MERIT IN THIS SPECIAL LE AVE PETITION FOR THE SIMPLE REASON THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE COMPANY FROM ALLEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER THEN THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THEIR INDIVIDUAL ASSESSMENTS IN ACCORDANCE WITH LAW. HENCE WE FIND NO INFIRMITY WITH THE IMPUGNED JUDGEMENT. 7. CONSEQUENTLY THE DOCTRINE OF MERGER WOULD APPLY AND THE JUDGEMENT OF THE SUPREME COURT IN LOVELY EXPORTS (P ) LTD. (SUPRA) WOULD COVER THE FIELD WITH REGARD TO INTERP RETATION OF SECTION 68 OF THE ACT. 8. IN ANY MANNER THE ONUS OF PROOF IS NOT A STATIC ONE. THOUGH IN SECTION 68 PROCEEDINGS THE INITIAL BURDE N OF PROOF LIES ON THE ASSESSEE YET ONCE HE PROVES THE I DENTITY OF THE CREDITORS/ SHARE APPLICANTS BY EITHER FURNI SHING THEIR PAN NUMBER OR INCOME TAX ASSESSMENT NUMBER AND SHO WS THE GENUINENESS OF TRANSACTION BY SHOWING MONEY / HIS BOOKS EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE THEN THE ONUS OF PROOF WOULD SHIFT TO THE REVENUE. JUST BECAUSE THE CREDITORS /SHARE APPLIC ANTS 9 COULD NOT BE FOUND AT THE ADDRESS GIVEN IT WOULD N OT GIVE THE REVENUE THE RIGHT TO INVOKE SECTION 68. ONE M UST NOT LOSE SIGHT OF THE FACT THAT IT IS THE REVENUE WHICH HAS ALL THE POWER AND WHEREWITHAL TO TRACE ANY PERSON. MOREOV ER IT IS SETTLED LAW THAT THE ASSESSEE NEED NOT TO PROVE THE SOURCE OF SOURCE. 9. FROM THE ABOVE PARAGRAPHS OF THE HONBLE JURISD ICTIONAL HIGH COURT DECISION IT IS SEEN THAT IT HAS BEEN HELD BY THE HONBLE HIGH COURT THAT WHEN ASSESSEE HAS PROVED THE IDENTITY O F THE SHARE APPLICANTS BY EITHER FURNISHING THEIR PAN NUMBER O R INCOME TAX ASSESSMENT NUMBER AND SHOWN THE GENUINENESS OF TRA NSACTION BY SHOWING MONEY EITHER BY ACCOUNT PAYEE CHEQUE OR BY DRAFT OR BY ANY OTHER MODE THEN THE ONUS OF PROOF WOULD SHIFT TO T HE REVENUE. IN THE PRESENT CASE ASSESSEE HAS DISCHARGED ITS ONUS TO P ROVE THE IDENTITY OF THE SHARE APPLICANTS. 10. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS RELIED UPON WE DO NOT FIND ANY INFIRMITY OR ILL EGALITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). ACCO RDINGLY WE UPHOLD THE SAME. 11. IN THE RESULT THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ASSESSEES CROSS OBJECTION 12. IN THE C.O. ASSESSEE HAS AGITATED AGAINST REOPE NING OF CASE BEING NOT VALID. WE FIND THAT WE HAVE ALREADY DECID ED THE ISSUE ON 10 MERITS OF THE CASE IN FAVOUR OF THE ASSESSEE. HENCE THE CO HAS BECOME INFRUCTUOUS. HENCE THIS C.O. STANDS DISMISS ED. DECISION PRONOUNCED IN THE OPEN COURT ON 22 ND JULY 2011. SD/- SD/- (C.L.SETHI (C.L.SETHI (C.L.SETHI (C.L.SETHI ) )) ) (SHAMIM YAHYA (SHAMIM YAHYA (SHAMIM YAHYA (SHAMIM YAHYA ) )) ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEM MEM MEM MEM BER BER BER BER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATED : 22.07.2011. VK/SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT ASSISTANT REGISTRAR ITAT